Douglas Emmett, a real estate investment trust (REIT), has announced the acquisition of a key office property in Los Angeles in joint venture with Qatar Investment Authority (QIA).

The 365,000-sq-ft Class "A" property, located at 12100 Wilshire Boulevard in the Brentwood submarket of Los Angeles, was acquired for $225 million, or $616 per sq ft.

12100 Wilshire Boulevard represents a classic Douglas Emmett acquisition of a multitenant building in a premier West Los Angeles submarket, said a statement.

Including known move-outs, the property will be 77 per cent leased, significantly below the 97 per cent average of Douglas Emmett's existing Brentwood portfolio, providing an opportunity to add meaningful value through lease-up, it said. The acquisition increases Douglas Emmett's ownership share of the Brentwood Class "A" office market from 50 per cent to 61 per cent, it added.

Douglas Emmett will manage the joint venture and expects to retain a 20 per cent to 30 per cent equity interest, with the remainder held by institutional partners.  Due to the below market occupancy of the property, it was acquired using a new secured, non-recourse $90 million interest only loan that matures in July 2019.  The loan bears interest at a floating rate of Libor plus 1.55 per cent.

For QIA, this joint venture represents another step in its plans to significantly expand its US investment portfolio, and follows other large investments in real estate, such as the Manhattan West project in New York City last year and the acquisition of the Westwood Office portfolio in Los Angeles earlier this year with Douglas Emmett as its partner. In 2015, QIA announced plans to invest $35 billion in North America over five years.  - TradeArabia News Service